Com score 2010 us digital year in review

The comScore 2010 U.S. Digital Year in Review FEBRUARY 2011

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2010 represented yet another exciting year in the evolution of the U.S. digital media industry. It was a

year that saw renewed optimism, continued innovation, and the increasing fragmentation of the media

landscape.

As digital marketers strategize for success in the year ahead, we must begin by reflecting on the events

of the past year if we are to make sense of the future. The many questions that will be addressed in this

report include:

• Which consumer trends dominated the digital media landscape in 2010?

• How are people spending their digital media consumption time?

• Which new and emerging technologies and services are capturing the attention of the

marketplace?

• What is the state of the digital advertising market?

• How is the rapid increase in mobile media usage changing consumer behavior?

The comScore 2010 U.S. Digital Year in Review offers an overview of the prevailing trends in digital

media usage during the year and considers their implications for the year ahead. This report will examine

the trends in U.S. Internet usage, search activity, e-commerce, online video consumption, online

advertising, and mobile, as we offer a prognosis for which digital strategies will be most critical for

success in 2011.


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Table of Contents: 2010 U.S. Digital Year in Review

U.S. E-Commerce 2010 ............................. ............................................................................... 4

Includes: Online Retail Trends, Top Spending Days, Group Buying Trends, Top Growing Retail Categories

U.S. Top Web Properties and Category Trends 2010 ........................................................... 7

Includes: Top Properties and Categories by Time Spent, Trends in Email Usage

U.S. Social Networking Trends 2010 .............. ...................................................................... 10

Includes: Top Social Network Trends, Facebook Stats, Demographic Analysis

U.S. Core Search Market 2010 .............................................................................................. 13

Includes: Core Search Trend, “Powered By” Reporting, Top Search Terms

U.S. Online Advertising 2010 ...................... ........................................................................... 16

Includes: Display Ad Trend, Top Display Advertisers & Publishers, Ad Effectiveness Trends

U.S. Online Video Market 2010 ................... .......................................................................... 21

Includes: Viewer Behaviors, Hulu & Broadcast Network Growth, Video Ad Networks, Ads vs. Content Viewing

U.S. Mobile Market 2010 .......................... .............................................................................. 25

Includes: Smartphone & 3G Trends, Market Share by OS, Network & OEM, Top Mobile Activities

Looking Ahead to 2011 ............................ .............................................................................. 29


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Online Spending Growth Resumes in 2010

Following two years of dampened online retail buying due to the economic downturn, 2010 was a year to

bounce back. Depressed consumer discretionary spending going back to the end of 2008 finally gave

way to improving consumer sentiment, helping lead the U.S. e-commerce market back to consistent

positive growth in 2010. Total U.S. e-commerce spending reached $227.6 billion in 2010, up 9 percent

versus the previous year. Travel e-commerce spending grew 6 percent to $85.2 billion, while retail (non-

travel) e-commerce spending jumped 10 percent to $142.5 billion for the year.

The 2010 holiday season represented a high point in this bounce-back year for retail e-commerce, with

growth rates surging to 12 percent – even outpacing comScore’s initial forecast of 11 percent for the

season. While some of the holiday season growth can be attributed to consumers taking advantage of

discounting and promotional activity online (most notably, free shipping), it is also a clear sign of

improving consumer confidence. Not surprisingly, November ($14.5 billion) and December ($18.1 billion)

were the heaviest online spending months of the year, and they also exhibited accelerating growth rates

versus the preceding months (Note: November and December growth rates calculated based on

comparable shopping days in 2009, not calendar dates.)

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

Spending Y/Y Growth

2010 U.S. Retail E-Commerce Spending ($MM)

and Y/Y Growth Rate by MonthSource: comScore E-Commerce Measurement

The comScore 2010 U.S. Digital Year in Review

Cyber Monday Breaks Billion Dollar Threshold

The heaviest individual spending day of the year was Cyber Monday (Monday, November 29, 2010) at

$1.028 billion. This historic day for e

spending surpassed $1 billion, but it also marks the first time that Cyber Monday ranked as the heaviest

online spending day of the season. In

million in spending, led by Monday, December 13 (aka “Green Monday”) with $954 million, Monday,

December 6 ($943 million), and Friday, December 17 ($942 million).

Consumer Electronics the Top Growing Online Retail

Several retail categories performed particularly well in 2010. Consumer Electronics ranked as the top

growing category by dollar sales at 19 percent growth, bolstered by the popularity of flat panel TVs and

mobile devices. Computer Hardware ranked second a

popularity of e-readers and netbooks contributing significantly to the gains. Books & Magazines (up 16

percent), Flowers, Greetings & Gifts (up 13 percent), and Jewelry & Watches (up 11 percent) rounded out

the top five.

Monday, Nov. 29

Monday, Dec. 13

Monday, Dec. 6

Friday, Dec. 17

Thursday, Dec. 16

Tuesday, Dec. 14

Tuesday, Nov. 30

Wednesday, Dec. 8

Thursday, Dec. 9

Tuesday, Dec. 7

Top 10 U.S. Online Retail Spending Days in 2010 in Millions

*November and December growth rates based on Source: comScore, Inc. (U.S.)

gital Year in Review

Breaks Billion Dollar Threshold


toric day for e-commerce was not only the first time on record that online retail


online spending day of the season. In addition to Cyber Monday, eight different days saw at least $900


December 6 ($943 million), and Friday, December 17 ($942 million).

Top Growing Online Retail Product Category



ardware ranked second at 17 percent, with low-priced computers and the

readers and netbooks contributing significantly to the gains. Books & Magazines (up 16


$954

$943

$942

$930

$913

$911

$901

$898

$880

Top 10 U.S. Online Retail Spending Days in 2010 in MillionsSource: comScore E-Commerce Measurement

Spending ($)

*November and December growth rates based on corresponding shopping days relative to Thanksgiving, not calendar days

FEBRUARY 2011

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commerce was not only the first time on record that online retail


different days saw at least $900




priced computers and the

readers and netbooks contributing significantly to the gains. Books & Magazines (up 16


$1,028

Top 10 U.S. Online Retail Spending Days in 2010 in Millions

corresponding shopping days relative to Thanksgiving, not calendar days


Local/Group- Buying and Flash Sales Sites Take Off

One of the hottest trends in e-commerce in 2010 was the emergence and ascendance of

buying and flash sales sites. On the

jumped out to a strong leading position, though LivingSocial has established itself as a strong second

player. Groupon.com attracted 10.7 million unique visitors in December, up 712 percent versus year ago,

while LivingSocial jumped 438 percent t

Consumer Electronics

Computer Hardware

Books & Magazines

Flowers, Greetings & Gifts

Jewelry & Watches

Top 5 Growing U.S. Retail ESource: comScore E

0

2,000

4,000

6,000

8,000

10,000

12,000

U.S. Unique Visitor (000) Trend for GrouponSource: comScore Media Metrix, Dec


Buying and Flash Sales Sites Take Off

commerce in 2010 was the emergence and ascendance of

buying and flash sales sites. On the local/group-buying side, Groupon – which pioneered



while LivingSocial jumped 438 percent to 5.7 million unique visitors.

16%

13%

11%

Consumer Electronics

Computer Hardware

Books & Magazines

Flowers, Greetings & Gifts

Jewelry & Watches

Y/Y % Change

Top 5 Growing U.S. Retail E-Commerce Categories in 2010Source: comScore E-Commerce Measurement, 2010 vs. 2009

U.S. Unique Visitor (000) Trend for GrouponSource: comScore Media Metrix, Dec-2009 to Dec-2010

Groupon

FEBRUARY 2011

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commerce in 2010 was the emergence and ascendance of local/group-

pioneered this market –



19%

17%

16%

Commerce Categories in 2010Commerce Measurement, 2010 vs. 2009


Meanwhile, another “deal”-based segment of e

Flash sale sites include daily deals of heavily discounted merchandise, often in the apparel and

accessories segment. Among the most notable sites in this segment are Gilt Groupe,

and RueLaLa, with each of these sites g

year

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Facebook Takes the Lead on Engagement

Though Google Sites and Yahoo! Sites remain

approximately 180 million visitors a month

spent online. In the past year, Facebook has surpassed each of the top three largest web properties,

capturing the #1 ranking by time spent in A

spent online in the U.S., up from 7.2

Gilt.com

Hautelook.com

Ideeli.com

RueLaLa.com

U.S. Unique Visitors (000) to Leading Flash SaleSource: comScore Media Metrix, Dec


based segment of e-commerce – flash sale sites – continue


accessories segment. Among the most notable sites in this segment are Gilt Groupe,

and RueLaLa, with each of these sites growing their respective U.S. audiences strongly

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Takes the Lead on Engagement

and Yahoo! Sites remain the most visited web properties in the U.S.

approximately 180 million visitors a month, Facebook is attracting an ever-increasing share of total time


capturing the #1 ranking by time spent in August 2010. Facebook now accounts for 12.3

online in the U.S., up from 7.2 percent just a year ago.

863

793

658

435

Gilt.com

Hautelook.com

Ideeli.com

RueLaLa.com

U.S. Unique Visitors (000) to Leading Flash Sale SitesSource: comScore Media Metrix, Dec-2010 vs. Dec-2009

+52%

+1%

+16%

+33%

FEBRUARY 2011

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continued to gain traction.


accessories segment. Among the most notable sites in this segment are Gilt Groupe, HauteLook, Ideeli

strongly over the past

in the U.S. with

increasing share of total time


. Facebook now accounts for 12.3 percent of time

Sites

+52%

+16%

+33%


Shift from ‘Traditional’ to ‘ New

Although the U.S. represents a very mature Internet market overall, onli

continue to exhibit noticeable shifts over time. Most notably, we have continued to witness a shift in time

spent away from portals toward online leisure activities

the top four online content areas

largest with 20.2 percent share of time spent, though that percentage has declined 1.4 poi

past year. Social Networking now ranks as the next most

online (up 3.8 percentage points), while Entertainment ranks third at 12.6 percent (up 0.8 percentage

points). As communication continues to shift to other channels, including social media and mobile, usage

of web-based email declined 1.5 percentage points to 11.0 percent of time spent.

0%

2%

4%

6%

8%

10%

12%

14%Trend in Share

Source: comScore Media Metrix, Dec


New’ Entry Points Continues

Although the U.S. represents a very mature Internet market overall, online consumer behavior patterns


online leisure activities such as social media and entertainment. Among

areas according to their share of overall time spent online, P

percent share of time spent, though that percentage has declined 1.4 poi

etworking now ranks as the next most engaging activity at 14.4 percent of time spent



based email declined 1.5 percentage points to 11.0 percent of time spent.

Trend in Share (%) of Time Spent for Top 5 U.S. Web PropertiesSource: comScore Media Metrix, Dec-2009 to Dec-2010

FEBRUARY 2011

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ne consumer behavior patterns


social media and entertainment. Among

of overall time spent online, Portals remains the

percent share of time spent, though that percentage has declined 1.4 points over the

engaging activity at 14.4 percent of time spent



Facebook.com

Google Sites

Yahoo! Sites

Microsoft Sites

AOL, Inc.

Time Spent for Top 5 U.S. Web Properties


Web-Based Email Usage Heads South

As communication platforms and devices continue to proliferate

begun to decline, particularly among youn

towards instant messaging, social media, and mobile communications. Total web

declined 8 percent in the past year, with the most precipitous decline occurring among 12

(down 59 percent). Usage also declined marginally among 18

declines were seen among 25-34 year olds (down 18 percent), 35

54 year olds (down 12 percent). In contrast, however, usage ac

22 percent) and among those age 65 and older (up 28 percen

adoption by these age segments

5%

10%

15%

20%

25%

Percent (%) Share of U.S. Time Spent Online forSource: comScore Media Metrix, Dec


Based Email Usage Heads South

platforms and devices continue to proliferate, the usage of web

begun to decline, particularly among younger segments of consumers who are increasingly shifting

towards instant messaging, social media, and mobile communications. Total web-

declined 8 percent in the past year, with the most precipitous decline occurring among 12

down 59 percent). Usage also declined marginally among 18-24 year olds, while more noticeable

34 year olds (down 18 percent), 35-44 year olds (down 8 percent) and 45

54 year olds (down 12 percent). In contrast, however, usage actually gained among 55

22 percent) and among those age 65 and older (up 28 percent), most likely because of continued Internet

adoption by these age segments.

Percent (%) Share of U.S. Time Spent Online for Top Content CategoriesSource: comScore Media Metrix, Dec-2009 to Dec-2010

FEBRUARY 2011

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, the usage of web-based email has

ger segments of consumers who are increasingly shifting

-based email usage

declined 8 percent in the past year, with the most precipitous decline occurring among 12-17 year olds

24 year olds, while more noticeable

44 year olds (down 8 percent) and 45-

tually gained among 55-64 year olds (up

because of continued Internet

Portals

Social Networking

Entertainment

e-mail

Top Content Categories


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Social Networking Continues Growth in

Social networking continued to gain momentum throughout 2010

users now visiting a social networking site each month. Social networking sites accounted for 12 percent

of all time spent online in 2010 with the average Internet user spending more than 4

sites each month. Globally, social networking accounts for 15.6 percent of online time among those age

15 and older. Among this same age population, social networking

Americans’ online time. It is clear that social networking has become an integral part of the fabric of the

Internet and one that is increasingly becoming integrated into the experience of so many different

activities online.

Women Extend Lead on Men in Social Networking Usage

One demographic trend that has continued in 2010 is women extending their lead over men in the share

of their online time spent on social networking sites. Specifically, women spent 16.8 percent of thei

– one out of every six minutes –

from a year earlier. By comparison, men spent 12.0 percent of their time on social networking sites in

December 2010, up 2.9 percentage points fro

these sites than men, but they are also accelerating their usage at a faster rate.

-59%-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

Age 12-17

Year-over-

Source: comScore Media Metrix, Dec


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Social Networking Continues Growth in 2010 as One of the Web’s Top Activities

Social networking continued to gain momentum throughout 2010, with 9 out of every 10 U.S. Internet

a social networking site each month. Social networking sites accounted for 12 percent

spent online in 2010 with the average Internet user spending more than 4

social networking accounts for 15.6 percent of online time among those age

15 and older. Among this same age population, social networking accounts for 14.4 percent of

It is clear that social networking has become an integral part of the fabric of the


Women Extend Lead on Men in Social Networking Usage


of their online time spent on social networking sites. Specifically, women spent 16.8 percent of thei

on social networking sites in December 2010, up 4.5 percentage points


December 2010, up 2.9 percentage points from last year. So women not only spend more of their time on

these sites than men, but they are also accelerating their usage at a faster rate.

-1%

-18%

-8%-12%

22%

Age 18-24 Age 25-34 Age 35-44 Age 45-54 Age 55

-Year Change in Time Spent Using Web-Based Email

by Age Segment in the U.S.Source: comScore Media Metrix, Dec-2010 vs. Dec-2009

FEBRUARY 2011

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2010 as One of the Web’s Top Activities

9 out of every 10 U.S. Internet

a social networking site each month. Social networking sites accounted for 12 percent

spent online in 2010 with the average Internet user spending more than 4.5 hours on these

social networking accounts for 15.6 percent of online time among those age

accounts for 14.4 percent of

It is clear that social networking has become an integral part of the fabric of the



of their online time spent on social networking sites. Specifically, women spent 16.8 percent of their time

on social networking sites in December 2010, up 4.5 percentage points


m last year. So women not only spend more of their time on

22%28%

Age 55-64 Age 65+

Based Email


Facebook Surges, Upstarts Gain Traction

2010 was another year in which the social networking category flexed its considerable muscle. Category

leader Facebook continued its momentum as it amassed millions of new users and people spent more

and more of their time on the site. Facebook accounted f

three out of every ten Internet sessions included a visit to the site.

However, beyond Facebook there were several other compelling stories to emerge from other social

media sites in 2010. The past year was

Although MySpace currently maintains its hold on the #2 ranking in the category with 50 million visitors in

December, its audience declined 27 percent and total time spent on the site declin

Business-oriented social networking site LinkedIn emerged as the third largest site in the category with

26.6 million visitors in December 2010

23.6 million visitors in December

stars emerged in the social networking space this year, as Tumblr.com surged 168 percent to 6.7 million

monthly visitors, while Formspring.me rose in popularity among younger social net

Formspring.me peeked in Q2 and slowed down as the year progressed, but even so, year over year

growth was more than 1,000% with

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Dec-2009 Feb

U.S.Trend in Share (%) of Time Spent on Social Networking Sites by GenderSource: comScore Media Metrix, Dec


Facebook Surges, Upstarts Gain Traction



and more of their time on the site. Facebook accounted for 10 percent of U.S. page views in 2010, while

three out of every ten Internet sessions included a visit to the site.


media sites in 2010. The past year was not quite as kind to MySpace as its user base saw some attrition.


December, its audience declined 27 percent and total time spent on the site declin

oriented social networking site LinkedIn emerged as the third largest site in the category with

in December 2010, up 30 percent vs. year ago. Twitter.com climbed 18 percent to

23.6 million visitors in December (not including third-party app or mobile usage). A couple of surprise


visitors, while Formspring.me rose in popularity among younger social net


with 5.3 million visitors in December.

Feb-2010 Apr-2010 Jun-2010 Aug-2010 Oct-2010

U.S.Trend in Share (%) of Time Spent on Social Networking Sites by GenderSource: comScore Media Metrix, Dec-2009 to Dec-2010

Females Males

FEBRUARY 2011

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or 10 percent of U.S. page views in 2010, while


not quite as kind to MySpace as its user base saw some attrition.


December, its audience declined 27 percent and total time spent on the site declined 50 percent.

oriented social networking site LinkedIn emerged as the third largest site in the category with

, up 30 percent vs. year ago. Twitter.com climbed 18 percent to

A couple of surprise


visitors, while Formspring.me rose in popularity among younger social networkers.


2010 Dec-2010

U.S.Trend in Share (%) of Time Spent on Social Networking Sites by Gender


Facebook Posts Gains Across Every Dimension of Usag e

In addition to its snowballing user base,

metric in 2010. Facebook’s U.S. audience grew to 153.9 million in December, an increase of 38 percent,

as it became the 4th most visited web property

month. Engagement metrics fared even better, with Facebook’s total time spent surging 79 percent to

49.4 billion minutes and total page views growing 71 percent to 76.8 billion. Facebook’s overall growth in

2010 can be attributed to a growing number of people using Facebook, visiting more frequently, and

viewing more content on each visit.

Facebook.com Total Unique Visitors (000)

% Reach

Average Daily Visitors

Total Minutes (MM)

Average Minutes per Usage Day

Total Pages Viewed (MM)

Average Pages per Usage Day

Average Minutes per Page

Average Usage Days per Visitor

Average Minutes per Visitor

Average Pages per Visitor

Average Minutes per Visit

Average Visits per Visitor

Average Visits per Usage Day

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

U.S. Unique Visitor (000) Source: comScore Media Metrix, Dec


Facebook Posts Gains Across Every Dimension of Usag e

ng user base, Facebook grew significantly across nearly every performance


most visited web property, reaching nearly 3 out of every 4 Internet users each



growing number of people using Facebook, visiting more frequently, and

viewing more content on each visit.

Dec-2009 Dec-2010 111,888 153,886

54.4 72.6

37,679 63,656

27,624 49,339

Average Minutes per Usage Day 23.7 25.0

44,891 76,836

Average Pages per Usage Day 38.4 38.9

0.6 0.6

Average Usage Days per Visitor 10.4 12.8

246.9 320.6

401 499

9.0 9.0

27.4 35.5

2.6 2.8

Visitor (000) Trend for Leading Social Networking SitesSource: comScore Media Metrix, Dec-2009 to Dec-2010

FEBRUARY 2011

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Facebook grew significantly across nearly every performance


4 Internet users each



growing number of people using Facebook, visiting more frequently, and

% Change 153,886 38%

72.6 34%

63,656 69%

49,339 79%

25.0 6%

76,836 71%

38.9 1%

0.6 4%

12.8 23%

320.6 30%

499 24%

9.0 0%

35.5 29%

2.8 5%

Facebook.com

Myspace

LinkedIn.com

Twitter.com

Tumblr.com

Formspring.me

for Leading Social Networking Sites


Shifting Age Profiles at Facebook

An analysis of the composition of visitors to Facebook and Twitter revealed shifting user demographics

over the past year. Facebook saw its

35.4 percent, while the under 18 year

1.9 points to 13.2 percent) made the biggest gains. Twitter.com, meanwhile, saw a significant 9.4 point

gain in the share of 18-34 year olds visiting the site

those under 18 declined 8.0 points to 9.5 percent. This shifting composition may reflect

among younger Twitter users towards other communication vehicles

party Twitter apps.

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Contextually Driven Searches Shake Up Search Market

The search user experience underwent

of contextually driven searches, which

part of the browsing experience. In response to this change, comScore began reporting an additional

view of the U.S. core search market known as ‘Explicit Core Search’, defined as engagement with a

search service with the explicit intent to retrieve search results.

was Google’s introduction of Instant Search

that allows users to see a full results page as they are typing a

9.9%

39.9%

39.0%

11.3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Dec-09

U.S. Demographic Profile

Share of Visitors to Facebook.comSource: comScore Media Metrix, Dec

+1.9

+1.2

+0.4

-3.6


Shifting Age Profiles at Facebook and Twitter

composition of visitors to Facebook and Twitter revealed shifting user demographics

over the past year. Facebook saw its 35-54 year old share of visitors decline 3.6 percentage points to

under 18 year olds (up 1.2 points to 11.1 percent) and those

e the biggest gains. Twitter.com, meanwhile, saw a significant 9.4 point

34 year olds visiting the site (representing nearly 47 percent of its visitors),

points to 9.5 percent. This shifting composition may reflect

among younger Twitter users towards other communication vehicles, including mobile devices and third

22001100

Contextually Driven Searches Shake Up Search Market

user experience underwent some significant changes in 2010, beginning with the emergence

, which occur when users engaged with related, non



intent to retrieve search results. Another innovation in the search market

’s introduction of Instant Search in September, a major enhancement to its search experience

a full results page as they are typing a query.

11.1%

40.3%

35.4%

13.2%

Dec-10


Share of Visitors to Facebook.comSource: comScore Media Metrix, Dec-20010 vs. Dec-2009

+1.9

+1.2

+0.4

3.6

17.5%

37.2%

34.6%

10.8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Dec-09


Share of Visitors for Twitter.comSource: comScore Media Metrix, Dec

-8.0

+9.4

+0.6

-2.1

FEBRUARY 2011

PAGE 13

composition of visitors to Facebook and Twitter revealed shifting user demographics

share of visitors decline 3.6 percentage points to

those age 55 and older (up

e the biggest gains. Twitter.com, meanwhile, saw a significant 9.4 point

ent of its visitors), while

points to 9.5 percent. This shifting composition may reflect, in part, a shift

including mobile devices and third-

, beginning with the emergence

with related, non-search content as



Another innovation in the search market

in September, a major enhancement to its search experience

9.5%

46.6%

32.5%

11.4%

Dec-10

Demographic Profile

Share of Visitors for Twitter.comSource: comScore Media Metrix, Dec-2010 vs. Dec-2009

8.0

+9.4

+0.6

2.1


PAGE 14

Google remained the clear market leader in 2010, accounting for more than 3 out of every 5 U.S.

searches throughout the year. The property peaked in December 2010 with 66.6 percent of explicit core

searches, while Yahoo! Sites ranked second at 16.0 percent. Microsoft Sites also reached its 2010 high

point in December, representing 12.0 percent of explicit core searches conducted. Ask Network and AOL

LLC ended the year with 3.5 percent and 1.9 percent of searches conducted, respectively.

The U.S. core search market grew 12 percent overall in 2010, driven by a 4-percent gain in unique

searchers and an 8-percent gain in searches per searcher. Google Sites’ search query volume grew 13

percent, driven mostly by gains in searches per searcher (up 10 percent). Microsoft Sites saw the largest

growth in search volume at 29 percent, propelled by sizeable gains in both unique searchers (8 percent)

and searches per searcher (20 percent).

U.S. Explicit Core Search Percent Change

Source: comScore qSearch, Dec-2010 vs. Dec-2009

Searches Unique

Searchers

Searches per

Searcher

Total Internet 12% 4% 8%

Google Sites 13% 3% 10%

Yahoo! Sites 4% 8% -4%

Microsoft Sites 29% 8% 20%

Ask Network 5% 8% -3%

AOL LLC -18% -25% 8%

66.0%

17.3%

10.4%

3.7% 2.6%

66.6%

16.0%12.0%

3.5% 1.9%

Google Sites Yahoo! Sites Microsoft Sites Ask Network AOL LLC Network

Percent Share of Searches Among U.S. Core Search Engines*Source: comScore qSearch, Dec-2010 vs. Dec-2009

Dec-2009 Dec-2010

*December – March data in the above graph represent share of total core searches, while

April onward represent share of explicit core searches.


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“Powered By” Reporting

In the latter half of the year, comScore began providing insight into the share of Explicit Core Searches

that are powered by the two major providers of algorithmic search results – Google and Bing. Google’s

“powered by” share is composed of searches conducted at Google entities, as well as searches on AOL

and Ask’s MyWebSearch, where Google branding is present. Bing’s “powered by” share is composed of

searches conducted at Bing entities, as well as Yahoo! searches where Bing branding is present. This

primarily consists of queries at Yahoo! Web Search, Yahoo! Image Search and Yahoo! Video Search.

Some of Yahoo!’s in-channel searches, such as Movies or Finance, are still provided by Yahoo!

In December, 69.4 percent of all searches carried organic search results from Google, while 24.4 percent

of searches were powered by Bing organic results.

Top Search Terms in 2010

An analysis using comScore Marketer™ revealed the top search terms overall in 2010, as well as the top

search terms that generated paid search clicks, across the 5 major search engines. The top search

phrase overall in 2010 was ‘facebook’, which accounted for 1.9 billion search queries over the course of

the year. ‘Youtube’ ranked second with 790.7 million searches, followed by ‘google’ with 615.9 million

searches and ‘yahoo mail’ with 562.2 million searches. Also ranking among the top search phrases for

the year were ‘Craigslist’ with 546.9 million searches, ‘MySpace’ with 360.1 million searches and ‘eBay’

with 311.1 million searches. The prevalence of popular websites among the top searches indicates the

heavy use of search for navigation, even in favor of typing in a URL into the browser’s navigation bar.

69.4%

24.4%

6.2%

"Powered By" Share of Explicit Core Searches in the U.S.Source: comScore qSearch, Dec-2010

Google Bing Other


PAGE 16

In terms of phrases generating the most paid search clicks in 2010, ‘ebay’ was a clear leader with 99.2

million clicks, suggesting a heavy paid search marketing strategy. ‘Netflix’ took second place with 43.1

million clicks, followed by ‘yellow pages’ with 36.2 million clicks and ‘Verizon wireless’ with 29.8 million

clicks.

Top Search Phrases on 5 Core Search Engines in the U.S. Source: comScore Marketer, Jan-2010 to Dec-2010

Search Phrase Organic

Searches (000)

Search Phrase

Paid Search

Clicks (000)

facebook 1,933,467 ebay 99,235

youtube 790,735 netflix 43,132

google 615,945 yellow pages 36,242

yahoo mail 562,167 verizon wireless 29,796

yahoo 553,125 home depot 27,460

craigslist 546,872 google 24,893

facebook login 503,093 mapquest 24,860

myspace 360,055 lowes 21,071

ebay 311,109 white pages 20,891

gmail 303,182 walmart 18,800

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Display Advertising Continues to Climb

Over the course of 2010, U.S. Internet users received a total of 4.9 trillion display ads (standard and non-

standard IAB ads, includes both static and rich media, but not video). The total number of ads grew 23

percent from December 2009 to December 2010, as the online advertising market rebounded strongly

from the impact of the recession.


Social Networking Publishers Drive

An analysis of publisher categories

year found that Social Networking

December 2010, an increase of 11 percent

of display ad impressions during the month

served 11 percent of display advertisements

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

Dec-

2009

Jan-

2010

Total U.S. Display Ad Impressions in Millions (MM)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Dec-2009 Feb-2010

Share of U.S. Display Ad Impressions by Top Publisher CategorySource: comScore Ad Metrix, Dec

Social Networking


Publishers Drive Display Ad Market

sher categories delivering the largest volume of display ad impressions

Social Networking publishers were responsible for 34 percent of the display a

, an increase of 11 percentage points from the previous year. Portals served 17

during the month, down 4 percentage points, while Entertainment publishers

of display advertisements, up 1 percentage point from the previous year.

Feb-

2010

Mar-

2010

Apr-

2010

May-

2010

Jun-

2010

Jul-

2010

Aug-

2010

Sep-

2010

Oct

2010

Total U.S. Display Ad Impressions in Millions (MM)Source: comScore Ad Metrix, Dec-2009 to Dec-2010

2010 Apr-2010 Jun-2010 Aug-2010 Oct-2010

Share of U.S. Display Ad Impressions by Top Publisher CategorySource: comScore Ad Metrix, Dec-2009 to Dec-2010

Portals Entertainment News/Information

FEBRUARY 2011

PAGE 17

lume of display ad impressions during the

percent of the display ads served in

. Portals served 17 percent

Entertainment publishers

from the previous year.

Oct-

2010

Nov-

2010

Dec-

2010

Total U.S. Display Ad Impressions in Millions (MM)

+11%

-4%

+1%

+2%

-10%

2010 Dec-2010

Share of U.S. Display Ad Impressions by Top Publisher Category

All Other


PAGE 18

Brand Advertisers Continue Shift to Digital

2010 also saw a continuing shift of advertising dollars online as more major brand advertisers continue to

invest in the medium. In Q4 2010, 104 different advertisers delivered more than 1 billion display ad

impressions, up from 80 in Q4 2009. Nearly all the growth came from those delivering between 1-3 billion

impressions, while the number of advertisers delivering at least 3 billion remained more consistent.

Top Display Advertisers and Publishers

Telecom companies were represented well in the ranking of top display advertisers for 2010. Network

providers AT&T Inc. (94 billion ad impressions) and Verizon (66.7 billion impressions) ranked as the top

U.S. online display advertisers in terms of total ad impressions served between January 2010 and

December 2010. Fellow carrier Sprint also made it into the top ten with 30.2 billion impressions, ranking

#8. Online trading company Scottrade ranked #3 with 59 billion impressions, while Experian Interactive

secured the #4 position with nearly 54 billion views, and eBay, Inc. rounded out the top five with 36.8

billion impressions.

55 5972

83 78

1213

12

1010

911

12

1212

45

4

44

0

20

40

60

80

100

120

Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010

10+ Billion

5-10 Billion

3-5 Billion

1-3 Billion

Number of Advertisers Delivering At Least 1 Billion

Display Ad Impression per Quarter in the U.S. Source: comScore Ad Metrix, Q4 2009 - Q4 2010


PAGE 19

From a publisher perspective, Facebook.com delivered the most display ads with more than 1 trillion ads

in 2010, setting an all-time record for ads delivered and the first to eclipse the 1 trillion ad threshold.

Yahoo! Sites, last year’s top display ad publisher, ranked second with 529.4 billion ads, followed by

Microsoft Sites in third place with 243.9 billion ads. Fox Interactive Media (200 billion ads) and AOL, Inc.

(130 billion ads) rounded out the top five.

Display Ad Creative Stays Static… For Now

In 2010 comScore introduced the Ad Metrix Creative Summary report to illustrate which types of ad units

are being delivered on various sites around the web. While significant innovation occurred in terms of the

different creative ad units being used in the display market, the increase in advertising volume actually

came from more static ad formats. Standard GIFs and JPEGs grew from 236 billion impressions in June

to 295 billion in December, while Flash ads actually declined from 162 billion impressions to 147 billion.

(Rich media display, though considerably lower in volume, did increase from 12 billion to 16 billion

impressions). This phenomenon in part reflects the emergence of Facebook, which primarily hosts static

ad units, as the leading display advertising channel. Despite this somewhat counterintuitive trend in the

use of different creative formats, more advanced formats are appearing online and should be deployed on

a larger scale in 2011.

94,096

66,683

59,014

53,995

36,828

30,592

30,202

30,196

29,643

26,991

AT&T Inc.

Verizon

Scottrade, Inc.

Experian Interactive

eBay, Inc.

IAC - InterActiveCorp

Progressive

Sprint Nextel

Netflix, Inc.

Apollo Group

Top Ten U.S. Online Display Advertisers by

Number of Impressions in Millions Source: comScore Ad Metrix, Jan-2010 to Dec-2010

1,019,891

529,378

243,879

200,175

130,159

128,247

74,958

44,054

32,884

32,405

Facebook.com

Yahoo! Sites

Microsoft Sites

Fox Int. Media

AOL, Inc.

Google Sites

Turner Digital

Glam Media

eBay

ESPN

Top Ten U.S. Online Display Publishers

by Number of Impressions in Millions Source: comScore Ad Metrix, Jan-2010 to Dec-2010


PAGE 20

Display Ad Placement Strategies Increase in Sophist ication

2010 saw the rapid emergence and acceptance of ad exchanges, demand-side platforms and other

sophisticated tools for the buying and selling of online advertising. With the emergence of these new

markets came an increasing focus on the effectiveness of various display ad placement strategies, such

as retargeting, efficiency pricing, contextual buys, run-of-network buys and premium buys. A 2010

comScore report, entitled When Money Moves to Digital, Where Should it Go? evaluated the relative

impact of several of these media-placement strategies on the Valueclick ad network to help begin to

answer some of these important questions. One of the key learnings from this research was that

retargeting (i.e. serving an ad to an audience who has previously visited an advertiser’s site) consistently

out-performed the others, making it a strong option for both direct response and longer-term branding

objectives.

236295

162

14712

16

0

50

100

150

200

250

300

350

400

450

500

Jun-10 Dec-10

Standard GIF/JPEG Flash Rich Media Display/Other

U.S. Online Display Advertising Impressions (Billions) by Creative FormatSource: comScore Ad Metrix Creative Summary, Dec-2010 vs. Jun-2010


PAGE 21

Retargeting generated a 1046-percent lift in branded search, far surpassing the lift generated by the other

strategies. Audience targeting followed at 514 percent lift, followed by premium placement (+300

percent), contextual targeting (+130 percent), run-of-network (+126 percent) and efficiency pricing (+100

percent). It should be noted that the other strategies have their own merits and therefore should be

considered depending on the campaign objective. For example, placements that optimize to quickly

deliver traffic, such as efficiency buys (i.e. buys that are based on cost-per-click engagement with

creative) and run-of-network/RON buys (i.e. buys that appear anywhere in the network and that are often

optimized by conversion) do not always encourage search activity or sustain audiences to a site over

time, but they do provide massive scale and some long-term branding effects.

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Online Video Gains Momentum in 2010

The online video market continued to gain momentum in 2010, with an average of 179 million Americans

watching video each month. Engagement levels also rose during the year, with viewers watching online

videos more frequently. More than 88.6 million people watched online video on an average day in

December 2010 (up 32 percent from December 2009), while viewing sessions totaled 5.8 billion for the

month (up 13 percent). Americans also spent a significantly higher number of hours viewing online video

in 2010 versus the prior year due to increased content consumption and more video ad streams. The

average American spent more than 14 hours watching online video in December, a 12-percent increase

from last year, and streamed a record 201 videos, an 8-percent increase.

0%

200%

400%

600%

800%

1000%

1200%

Retargeting Audience Premium Contextual RON Efficiency

Percent Lift in Number of People who Searched for a Marketer’s Brand

within Four Weeks of Ad Exposure in the U.S.

+1046%

+514%

+300%

+130% +126% +100%

Based on 103 campaigns running July 2009 thru March 2010, which were delivered by ValueClick Media

To download the full report, entitled When Money Moves to Digital, Where Should it Go?, please visit: http://bit.ly/gdspzb.


PAGE 22

Online TV Viewing on Upward Trajectory

The world of online video has seen a continued increase in adoption of viewing originally scripted TV

content. While Hulu continues to drive a large portion of this online TV viewing activity, other major

broadcast TV sites are playing an increasing role. In Q4 2010, Hulu accounted for 19.4 billion minutes

(323 million hours) of online TV viewing, up 17 percent from the previous year. The five major broadcast

TV sites (ABC, CBS, NBC, Fox and the CW) combined to account for 9.7 billion minutes (162 million

hours), which equates to half of the total time spent viewing video on Hulu, but grew at approximately five

times the rate at 82 percent. The total combined time spent viewing online TV on Hulu and the five

network sites grew 33 percent over the past year. This strongly growing market represents one of the

most significant opportunities for advertisers with this attractive advertising channel generating both high

engagement from viewers and high CPMs for publishers.

67.3

88.6

Dec-2009 Dec-2010

Average Daily Unique

Viewers (Millions)

5.1

5.8

Dec-2009 Dec-2010

Viewing Sessions

(Billions)

187

201

Dec-2009 Dec-2010

Videos per

Viewer

12.7

14.2

Dec-2009 Dec-2010

Hours per Viewer

Growth in Total U.S. Online Video Market Source: comScore Video Metrix, Dec-2010 vs. Dec-2009


PAGE 23

Video Ad Networks Prove Far-Reaching

Video ad networks also performed strongly in 2010 due to the continued proliferation of video advertising,

with video ads now reaching 7 out of 10 Americans online and nearly 1 out of 2 Americans nationwide

each month. In December 2010, video ad networks served 5.9 billion ads, averaging 40 ads per viewer

and 0.4 minutes per ad. Tremor Media Video Network took the top spot among video ad networks in

December, delivering 1.0 billion ads to reach 40.8 percent of online video viewers, an average of 12 ads

per viewer. BrightRoll Video Network reached 31.8 percent of online viewers, while ADAP.TV reached

fewer viewers (27.1 percent) but delivered a higher number of video ad streams (681.5 million).

Top U.S. Video Ad Networks* by % Reach Web Population** Source: comScore Video Metrix, Dec-2010

% Reach

U.S. Web

Pop

% Reach

Total U.S.

Pop

Video Ads

(000)

Ads per

Viewer

Minutes

per Video

Video Ad Networks (Actual Reach) 70.0% 49.1% 5,910,646 39.8 0.4

Tremor Media Video Network 40.8% 28.6% 1,021,693 11.8 0.5

BrightRoll Video Network 31.8% 22.3% 587,946 8.7 0.6

ADAP.TV 27.1% 19.0% 681,543 11.9 0.6

TubeMogul Video Ad Platform 20.2% 14.2% 174,062 4.1 0.6

BBE 15.0% 10.5% 126,321 4.0 0.4

0

5,000

10,000

15,000

20,000

25,000

30,000

Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010

Hulu 5 Major Broadcast Network Sites

Online TV: U.S. Trend in Minutes (MM) Spent Watching Hulu & Top 5 Broadcast Network Video Source: comScore Video Metrix, Q4 2009 - Q4 2010

*Based on video ads served

**Based on actual reach measures


PAGE 24

Video Advertising Market Takes Shape in 2010

The launch of comScore Video Metrix 2.0 with June 2010 data provided enhanced visibility into the

viewing of video content vs. video ads. In the half year of this new view of the online video market, there

has been a consistent increase in video advertising as a percentage of total online viewing – a sign of the

improving monetization of the medium. According to December 2010 Video Metrix data, video ads

comprised 16.4 percent of all videos streamed, up from 12.2 percent in June. Although video ads now

account for approximately one in every six videos viewed, they do not yet represent a significant

interruption to the online viewing experience, as they only account for 1.6 percent of all time spent

viewing video (up from 1.2 percent in June). While monetization of online video is increasing quickly, it is

clear there is still significant opportunity when considering that TV content has approximately 25 percent

advertising coverage compared to just 1.6 percent online.

12.2%

9.8%10.7%

12.3% 12.8%

15.3%

16.4%

1.2% 0.9% 1.0% 1.2% 1.2% 1.4% 1.6%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Jun-2010 Jul-2010 Aug-2010 Sep-2010 Oct-2010 Nov-2010 Dec-2010

Video Ads as % of Total Views Video Ads as % of Total Time Spent

U.S. Video Advertising as a Percentage of Total Online Video ConsumptionSource: comScore Video Metrix, Jun-2010 to Dec-2010


UU..SS.. MMoobbii llee MMaarrkkeett 22001100

A Game-Changing Year for Mobile

2010 was a year of undeniable progress in the mobile arena

devices were introduced to the market, mobile content options con

library of applications paired with improvements to the mobile browsing experience,

the word “mobile” evolved with the introduction of tablet devices such as the iPad.

mobile were crossed during the year

penetration crossed the 50 percent threshold, signaling the

In December 2010, nearly 47 percent of mobile subscribers were connected media users

accessed applications or downloaded content)

growth in mobile media usage is largely attributable to

ownership and the increasing ubiquity of unlimited da

mobile media. From December 20

with unlimited data plans increased from

unlimited data plan subscription at the time of purchase. During the same period, smartphone ownership

increased from 17 percent to nearly 27

threshold in November 2010.

0%

10%

20%

30%

40%

50%

60%

Dec-2009 Mar

Growth of Mobile Market Enablers in the U.S.Source: comScore MobiLens, 3 mo. avg. ending Dec

Smartphone Owners


Changing Year for Mobile

10 was a year of undeniable progress in the mobile arena. A wide variety of increasingly advanced

introduced to the market, mobile content options continued to increase with an ever

paired with improvements to the mobile browsing experience,

with the introduction of tablet devices such as the iPad.

year as smartphones reached 1 in 4 mobile Americans

ercent threshold, signaling the maturation of the mobile industr

ercent of mobile subscribers were connected media users

accessed applications or downloaded content), up 7.6 percentage points from the previous year

growth in mobile media usage is largely attributable to the growth in smartphone adoption, 3G/4G

ownership and the increasing ubiquity of unlimited data plans, all of which facilitate the consumption of

. From December 2009 to December 2010, the percentage of mobile

ited data plans increased from 21.7 percent to 29.0 percent, with more phones now requiring

mited data plan subscription at the time of purchase. During the same period, smartphone ownership

nearly 27 percent, while 3G/4G phone ownership reached

Mar-2010 Jun-2010 Sep-2010

Growth of Mobile Market Enablers in the U.S.Source: comScore MobiLens, 3 mo. avg. ending Dec-2009 to Dec-2010

Smartphone Owners 3G/4G Subscribers Unlimited Data Plan Subscribers

FEBRUARY 2011

PAGE 25

of increasingly advanced

tinued to increase with an ever-growing

paired with improvements to the mobile browsing experience, while the definition of

with the introduction of tablet devices such as the iPad. Major milestones in

1 in 4 mobile Americans and 3G

the mobile industry.

ercent of mobile subscribers were connected media users (used browsers,

percentage points from the previous year. The

the growth in smartphone adoption, 3G/4G device

litate the consumption of

of mobile phone subscribers

phones now requiring an

mited data plan subscription at the time of purchase. During the same period, smartphone ownership

reached the 50 percent

+9.4 pts

+7.6 pts

+7.3 pts

Dec-2010

2010

Unlimited Data Plan Subscribers


PAGE 26

U.S. Smartphone Adoption Surges Past 25 Percent Pen etration

The smartphone market continued to see strong growth in 2010 with an increasing number of smartphone

devices introduced to the market, giving consumers a wide variety of options to choose from when

purchasing a phone. Among the high-profile smartphone introductions in 2010 were the iPhone 4,

Windows Phone 7, Droid Incredible by HTC, Motorola Droid X, RIM BlackBerry Torch, T-Mobile G2,

Samsung Epic 4G and others. In September 2010, smartphone ownership crossed the 25 percent

threshold, marking a significant milestone in smartphone adoption in the U.S. By December 2010,

smartphone penetration had reached 27 percent of the mobile market. One of the most talked about

stories in mobile during 2010 was the rapid adoption of Google Android devices, which made Google the

second largest operating system (OS) by the end of the year, trailing only market leader RIM. Among

smartphone OS platforms, RIM retained its lead with 31.6 percent market share in December 2010

(although decreasing 10 percentage points from the previous year), followed by Google at 28.7 percent

(surging 23.5 percentage points in the past year), Apple’s market share remained mostly flat at 25

percent, while Microsoft followed at 8.4 percent (down 9.5 percentage points).

Verizon Leads as America’s Largest Network Operator , AT&T Home to More Smartphone Users

The largest four mobile network providers, Verizon, AT&T, T-Mobile and Sprint, combined to account for

82 percent of the U.S. mobile subscriber market (age 13+) in December 2010. Verizon led the U.S.

mobile market as the carrier for 31.3 percent of mobile subscribers, with AT&T accounting for 26.6

percent share, followed by T-Mobile (12.2 percent) and Sprint (11.9 percent). When looking exclusively at

the smartphone market, AT&T holds a solid lead with 38.3 percent market share, compared to Verizon’s

26.7 percent. However, as an increasing number of smartphone options have become available across

carriers, AT&T has seen its smartphone share decline 6 percentage points since December 2009.

Meanwhile, Verizon has climbed 3.5 percentage points during the same time period as Android devices

using Verizon have penetrated the market at a rapid clip. With the recent iPhone/Verizon announcement,

the industry is waiting to see how this deal will shake up the operator market in 2011.

27%

73%

U.S. Smartphone Penetration Source: comScore MobiLens, 3 mo.

avg. ending Dec-2010

Smartphone Non-Smartphone

31.6%

28.7%

25.0%

8.4%

3.7%2.5%

U.S. Smartphone OS Market ShareSource: comScore MobiLens, 3 mo. avg. ending

Dec-2010

RIM

Google

Apple

Microsoft

Palm

Symbian


PAGE 27

Samsung Leads Device Manufacturer Market

Samsung unseated last year’s OEM (original equipment manufacturer) leader, Motorola, to rank as top

OEM provider with 24.8 percent of devices owned by mobile subscribers in December 2010, up 3.6

percentage points from the previous year. LG captured the second largest share of the handset market

with 20.9 percent (declining 1.0 percentage points versus the previous year), followed by Motorola with

16.7 percent (down 6.7 percentage points) and RIM with 8.5 percent (up 1.5 percentage points). Apple

captured 6.8 percent of the OEM market, up from 4.3 percent share the previous year, as the introduction

of the iPhone 4 bolstered its growth.

31.3%

26.6%

12.2%

11.9%

6.0%

4.2%2.8%

2.2%1.8%

U.S. Network Operator ShareSource: comScore MobiLens, 3 mo. avg.

ending Dec-2010

26.7%

38.3%

15.1%

15.9%

0.01.0 0.8 1.1 0.7

U.S. Smartphone Operator ShareSource: comScore MobiLens, 3 mo.

avg. ending Dec-2010

24.8%

20.9%

16.7%

8.5%

8.2%

7.0%

6.8%

2.3%1.7%

1.4% 1.1% 0.5%

OEM Installed Base U.S. Market ShareSource: comScore MobiLens, 3 mo. avg. ending Dec-2010

Samsung

LG

Motorola

RIM

Other

Nokia

Apple

Kyocera

Sanyo

Sony Ericsson

Palm

UTStarcom


PAGE 28

Top Mobile Activities: One-third of Americans Acces s Mobile Browsers and Applications

Consumers turned to their mobile devices in growing numbers and increasing frequency throughout the

year. A look at some of the top mobile activities in 2010 demonstrated consumers’ need for

communication, information and entertainment. Text messaging led as the top mobile activity with 68

percent of American mobile subscribers texting in December 2010, while more than half (52.4%) took a

photo with their mobile device and 39.5 percent of subscribers accessed news and information. Although

application usage continued to grow in 2010, slightly more Americans (36.4 percent) used their mobile

browser than accessed applications (34.4 percent). Other top mobile activities included emailing (30.5

percent), accessing weather information (25.2 percent), and using social networking or blogs (24.7

percent).

68.0%

52.4%

39.5%

36.4%

34.4%

30.5%

25.2%

24.7%

23.2%

21.4%

20.2%

17.8%

17.2%

15.8%

15.7%

Sent text message

Took photo

Accessed news and information

Used browser

Used application

Used email

Accessed weather

Accessed social networking or blogs

Played games

Accessed search

Captured video

Accessed maps

Used instant messenging

Accessed sports information

Listened to music

Top Mobile Activities in the U.S. Source: comScore MobiLens, 3 mo. avg. ending Dec-2010


PAGE 29

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Time for Marketers to Seize Opportunities in the Ec onomic Upswing

2010 was a year of renewed optimism and excitement in the digital media industry, with many sectors

seeing strong rebounds from 2009. While the forthcoming year promises continued innovation and a

multitude of new opportunities, effective marketers will need to focus their energy and resources on the

highest value endeavors. They must realize that it is not wise to chase every shiny object emerging on

the digital landscape, as not every innovation is the right fit for a given company or brand. Rather,

marketers should understand not only what is happening in the broader marketplace, but why a certain

company has been successful in that market and – perhaps most importantly – what is says about

consumer behavior. The companies that adapt these learnings most effectively to their businesses and

leverage them appropriately will be the ones that get ahead in 2011.

With that in mind, the following is a summary of the key digital media trends that businesses should

consider as part of their broader strategies if they want to position themselves for success in the coming

year:

• E-Commerce: After two years of sluggish online spending, retail e-commerce bounced back to

double-digit growth rates in 2010, as consumers opted for the convenience and lower prices

enabled by the medium. As an advertising medium, the online channel also continues to be an

important driver of offline buying, so marketers in all industries must not only have an online

presence, but understand how it drives both online and in-store purchase behavior. With group-

buying and flash deal sites rapidly creating new sectors in online retail, brands have more

opportunities to attract new customers -- but it is important to meet the expectations of these

consumers if there is any chance of engendering long-term loyalty. Many consumers continue to

be very price-sensitive, but others have simply become accustomed to getting deals, so retailers

must understand their prospective consumers’ psychology and have a strategy that enables them

to maintain margins while delivering long term customer value.

• Social: 2010 represented yet another huge year for social media, and it can safely be assumed

that 2011 will see a continuation of this trend. Businesses that have no social media presence in

2011 are likely to be left behind; however, social media may not necessarily be worth significant

investment for every company or brand. To promote your product or brand through social media

or to use it as a means of obtaining customer feedback, it is important to understand how

consumers may (or may not) use the medium. Every brand should, at a minimum be listening to

what consumers are saying and most should probably engage directly with them. Developing

more advanced social media tools should be a function of whether or not your customers are

likely to be strong brand ambassadors or not. It should also be noted that (mainly due to


PAGE 30

Facebook) social networking sites now account for more than one-third of all display ads

delivered online, while Twitter expects to become a bigger player on the advertising stage with

“promoted tweets” in 2011. Social media ads often tend to be priced lower than many other

display ads across the web, which can mean the opportunity for very cost-effective advertising

that can reach tens of millions of consumers.

• Search: From a consumer experience standpoint, the U.S search market continues to evolve,

with Google and Bing both making strides in the past year. Through Bing’s partnership with

Yahoo!, it now controls nearly 30 percent of the search market making it more able to compete

with Google, and helping to push forward new innovations. We have seen the integration of real-

time search, improved blended search results and other new search modules, all of which have

enriched the search experience. 2011 promises to give a clearer view of how the integration of

social data may further enhance the quality of search results.

• Advertising: Throughout 2010 we saw the display advertising market become increasingly

advanced, requiring a similar level of sophistication in the measurement of its effectiveness. With

more dollars than ever before moving to digital and the introduction of several new media-

placement strategies, marketers increasingly require deep, accurate and holistic insights to guide

their pre- and post-campaign strategies. In 2011, look for an increasing demand from marketers

for end-to-end measurement across the digital advertising ecosystem. In order to maximize the

value of advertising in the channel, marketers will seek solutions that answer all of their

measurement questions, using consistent data sources and holistic measurement techniques.

• Video: Online video viewing continues to account for an increasing amount of consumers’ time

online, as content options, quality and convenience drive people to this channel. Video ads will

continue to offer advertisers an engaging venue to reach their target audience and will be an

important aspect of the development of the online video industry. In 2011, look for cross media

relationships to take center stage as the convergence of traditional TV and online video viewing

continues to blur the lines between media channels.

• Mobile : The perfect storm aligned for mobile in 2010, as smartphone adoption, device

innovations (including tablets) and improvements in network speeds all took hold – and it can be

expected that these factors will continue to be strong drivers of mobile media consumption in

2011. One can expect to see continued growth in the use of mobile devices to obtain real-time

price and product information in support of an intended in-store buying decision and the likelihood

that the information obtained will drive some of that buying activity to actually occur online. While

still in its infancy, mobile advertising will also become an increasingly important component of the

mobile landscape in 2011, as the convenience and nearly ubiquitous nature of mobile make this

platform potentially extremely valuable for advertisers. Importantly, there will likely be an early


PAGE 31

industry focus on higher click-through rates on mobile ads, but this metric is somewhat of a red

herring as curious consumers will be more likely to engage with new ad units in the early days of

the mobile ad industry. It will be essential to understand the view-through impact and longer term

brand-building that mobile ads can deliver. Brands must also remember that mobile media is not

just an extension of PC-based Internet usage, but is itself a unique platform that by its nature will

influence the how, what, where, why and when of consumers’ media consumption. As

competition heats up across operating systems, device manufacturers and carriers, consumers

stand to reap the benefits of a growing number of attractive options in their mobile decisions.

Each year brings new hope, and it’s clear that the opportunities in digital media in 2011 are virtually

limitless. But, only with a firm grasp on the rapidly evolving landscape will companies be able to employ

the most sound business strategies, leverage their strengths, and maximize the returns for both their

customers and for themselves.

comScore, Inc. (NASDAQ: SCOR) is a global leader in measuring the digital world and preferred

source of digital business analytics. comScore helps its clients better understand, leverage and profit from

the rapidly evolving digital marketing landscape by providing data, analytics and on-demand software

solutions for the measurement of online ads and audiences, media planning, website analytics,

advertising effectiveness, copy-testing, social media, search, video, mobile, cross-media, e-commerce,

and a broad variety of emerging forms of digital consumer behavior. comScore services, which now

include the product suites of recent acquisitions Nedstat, Nexius XPlore, ARSGroup and Certifica, are

used by more than 1,600 clients around the world, including global leaders such as AOL, Baidu, BBC,

Best Buy, Carat, Deutsche Bank, ESPN, Facebook, France Telecom, Financial Times, Fox, Microsoft,

MediaCorp, Nestle, Starcom, Terra Networks, Universal McCann, Verizon Services Group, ViaMichelin

and Yahoo!. For more information, please visit www.comScore.com.

FOR MORE INFORMATION, PLEASE CONTACT:

Sarah Radwanick

comScore, Inc.

+1 206 268 6310

[email protected]

Com score 2010 us digital year in review

Technology

heavily discounted

netbooks contributing

surprise stars

exhibit noticeable

flat panel

social networking

explicit core

younger social